Britain races to get US trade deal before Trump’s tariffs

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Intense negotiations are underway as Britain’s government races against time to secure a post-Brexit trade arrangement with the United States, aiming to soften the impact of impending tariffs scheduled for announcement by President Donald Trump on Wednesday.

Since its departure from the European Union in early 2020, the UK has actively pursued a trade agreement with the US, though previous attempts under the Conservative administration proved unsuccessful.

Following his Washington visit in late February, Labour Prime Minister Keir Starmer expressed optimism about reaching an agreement. Trump reciprocated this sentiment, praising Starmer’s negotiating skills and suggesting the possibility of a “great” deal that could help Britain avoid tariffs.

Britain Looks to Ink Post-Brexit Trade Deal with Trump to Avoid Tariffs https://t.co/kEN9RuRJUX via @BreitbartNews

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Good to see that the U.S. doesn’t have to take it in the shorts anymore.

— Crazy Rolls On (@Dragontail110) March 29, 2025

Diplomatic efforts have intensified, with Business Secretary Jonathan Reynolds making a recent trip to Washington, while Starmer and Trump continued discussions via telephone this week.

The British government is working against an April 2 deadline – dubbed “Liberation Day” by Trump – when he plans to reveal what he calls “reciprocal” tariffs customized for different trading partners. This follows Trump’s recent announcement of substantial tariffs on imported vehicles and auto parts, a move that has heightened trade tensions and raised concerns about potential price increases.

“We’re engaged in discussions with the United States about mitigating the impact of tariffs,” Starmer commented before the weekend.

Taking a diplomatic approach, Finance Minister Rachel Reeves indicated on Thursday that Britain would avoid “escalating” trade conflicts, adopting a notably different stance from other major economies that have suggested retaliatory measures against the auto-sector tariffs.

The potential agreement, which Number 10 has termed an “economic prosperity deal,” is expected to be more limited than the comprehensive free trade agreement London ultimately desires. This is particularly significant given that the US represents Britain’s largest single-country trading partner.

“Some type of arrangement that might let the UK escape some tariffs is possible but it would not be a full-scale trade deal,” Jonathan Portes, professor of economics at King’s College London, told AFP.

“Brexit is a double edged sword — it gives us more flexibility and we can negotiate with a view to our own interests. But equally, it means we have less weight than as part of the EU and moreover we cannot afford to agree to anything that complicates our trading relationship with the EU,” Portes added.

The UK is holding urgent talks with the US government in a bid to avoid being hit by extra tariffs planned by President Donald Trump, Chancellor of the Exchequer Rachel Reeves said https://t.co/NDgbtSF0JA pic.twitter.com/Wd3bRXrO3h

— Bloomberg (@business) March 27, 2025

Reports in British media suggest London might consider abolishing its tech giant tax to avoid US tariffs under Trump and facilitate a trade agreement. In response, Starmer emphasized that “in the end, our national interest has to come first, which means all options are on the table.”

His spokesman reinforced the government’s commitment to ensuring “businesses pay their fair share of tax, including businesses in the digital sector.”

The tech tax currently generates approximately £800 million ($1 billion) annually for the UK Treasury. Reynolds acknowledged that the digital tax isn’t “something that can never change or we can never have a conversation about.”

Both Portes and David Henig, director of the UK Trade Policy Project, cautioned about the risks of modifying Britain’s tax policy in exchange for Trump’s promises regarding tariff exemptions.

“If Trump keeps his word and the UK gains significant benefits as a result, then eliminating a tax could be a good deal,” Henig told AFP. “That, however, is quite a gamble.”